Core Viewpoint - The article discusses the emerging challenge to the US dollar's global dominance, highlighting China's efforts to rebuild a trust system for currency using gold, marking a revolutionary shift in the concept of money [1]. Group 1: Dollar Trust Erosion - For decades, over 70% of global foreign exchange reserves were tied to dollar assets, with countries relying on US Treasury bonds to safeguard their wealth [3]. - The freezing of approximately $300 billion of Russia's foreign reserves by the US in 2022 shattered this trust, signaling that the dollar is not merely an asset but a liability of the US [3]. - This incident prompted central banks worldwide to reduce their holdings of US Treasuries and increase their gold reserves, with China emerging as the largest official gold buyer [3]. Group 2: China's Gold Corridor - China has established a "Gold Corridor" centered around the Shanghai Gold Exchange, which is the largest physical gold market globally, supported by a network of vaults in Hong Kong, the Middle East, and Africa [6]. - This system allows countries holding renminbi to directly exchange it for physical gold, effectively transforming the renminbi into a reserve currency backed by gold [6]. - The initiative aims to create a parallel financial system to the US dollar, bypassing traditional systems like SWIFT and the IMF, with a focus on BRICS nations [6]. Group 3: Future of Gold in Finance - By July 2025, gold will be recognized as a level one asset under Basel III, allowing it to be counted at 100% value on banks' balance sheets, restoring its status as a monetary asset [6]. - Central banks are pushing for gold to be classified as a "high-quality liquid asset," which would enable it to be used for collateral in repurchase financing, fundamentally altering the global financial system [6]. Group 4: Diverging Financial Systems - A clear division is emerging between two financial systems: one led by China and the BRICS, anchored in gold, and the other by the US and the West, based on digital dollars and stablecoins [9]. - This transformation is already impacting asset prices, with central banks and sovereign funds averaging 20% of their reserves in gold or equivalent physical assets, with recommendations to increase this to 30% [9]. - The anticipated increase in gold demand could reach approximately $2 trillion globally, as gold cannot be printed like dollars, suggesting a potential "structural revaluation" of gold prices in the next five years [9]. Group 5: Investment Strategies - Investment strategies are becoming clearer, with recommendations for strategic allocations in gold ETFs, cyclical assets like copper and other metals, and innovative assets such as Bitcoin [9]. - Assets denominated in renminbi, including government bonds, blue-chip stocks, and commodities, are expected to benefit from the trend of de-dollarization, becoming new safe havens as global capital exits the dollar system [9]. Group 6: Trust in Currency - Gold represents a return to "trust," while Bitcoin symbolizes "innovation in trust," together forming the dual pillars of the post-dollar era [11]. - The future may see a diversified currency landscape, with China rebuilding tangible trust through gold and the US maintaining institutional trust through technology [11].

Core Insights - The global monetary landscape is undergoing a significant transformation, with a shift from a dominant currency structure to a more diversified system, influenced by different camps focusing on varying foundations of monetary trust [1][4][19] Group 1: Dual Monetary Systems - The current financial environment is characterized by a bifurcation in the monetary system, with one side led by China and BRICS nations advocating for a "Gold Standard 2.0," relying on tangible gold, while the other side, led by the U.S. and Western allies, promotes a technology-driven approach with digital dollars and stablecoins [4][8] - This division is not sudden; it has been developing as the U.S. Treasury and Federal Reserve have been quietly repatriating gold from London since November 2024, with New York Commodity Exchange gold inventories increasing from 17.2 million ounces to 34.6 million ounces in just three months [6][8] Group 2: Erosion of Dollar Trust - The dollar's dominance has been challenged, particularly after the U.S. froze approximately $300 billion of Russian foreign reserves in 2022, signaling that the dollar is a political tool rather than a secure asset [8][9][11] - Since 2023, global central banks have shifted towards gold, with countries like China, India, and Turkey significantly increasing their gold purchases, while major holders of U.S. Treasury bonds have begun to reduce their holdings [11][13] Group 3: China's Gold Corridor Strategy - China has established a "Gold Corridor" system, centered around the Shanghai gold market, allowing countries holding renminbi to convert it into gold, enhancing the renminbi's status as a hard currency [13][15] - A new settlement channel has been created to bypass SWIFT and the IMF, enabling BRICS nations to use gold as collateral for loans, which could fundamentally change global financing dynamics [15][17] Group 4: Future of Gold and Currency - The inclusion of gold as a primary asset in Basel III by July 2025 could restore gold's monetary identity, leading to a significant transformation in global financial logic [15][21] - Central banks are currently allocating 20% of their reserves to gold, with suggestions to increase this to 30%, indicating a potential $2 trillion increase in demand for gold, which is expected to undergo a "systemic revaluation" in the next five years [17][21] Group 5: Long-term Trends - The competition between trust mechanisms—China's tangible gold trust versus the U.S.'s rule-based trust—will reshape the global financial landscape, with the dollar's trust foundation eroding and gold regaining prominence [19][21] - As the monetary system diversifies, individuals will need to adapt their asset allocation strategies, with gold ETFs and renminbi-denominated assets emerging as viable options [21]

Core Viewpoint - The surge in gold prices to unprecedented levels signals a global financial trust crisis, marking the end of an old era and the birth of a new monetary landscape, with China reshaping the global currency trust logic based on gold [1][18]. Group 1: Dollar's Declining Trust - The dollar's status as the world's safest asset has been undermined, particularly after the U.S. froze $300 billion of Russian foreign reserves, revealing the dollar as a political tool rather than a universal deposit [3][5]. - By 2025, the repercussions of this trust crisis are expected to be significant, with the U.S. fiscal deficit surpassing $1 trillion in just five months and the dollar index dropping nearly 10% within the year [3][5]. Group 2: Central Banks' Response - In response to the declining trust in the dollar, global central banks net purchased 1,136 tons of gold in 2024, the second-highest level in history, with China, Poland, and Turkey accounting for over half of the purchases in the first quarter of 2025 [5][10]. - China's official gold reserves have reached an impressive 73.9 million ounces, reflecting a strategic move beyond mere accumulation to enhancing the international status of the renminbi [5][10]. Group 3: Shanghai Gold Exchange (SGE) Developments - The SGE has established a "gold corridor" that allows gold bars produced in China to be directly traded on the international board, significantly reducing transaction costs [7][10]. - By 2025, the business scale of this "gold corridor" is expected to exceed 10 billion yuan, enabling Southeast Asian countries to purchase Chinese goods directly with renminbi in exchange for physical gold [8][10]. Group 4: New Monetary Pathways - The SGE's international version has already reached 3.67 trillion yuan in transaction volume in the first ten months of 2024, covering 16 countries and facilitating a new path to bypass dollar settlements [10][12]. - The BRICS nations are exploring the possibility of using gold as collateral for loans in renminbi for infrastructure projects in Africa, aiming to escape dollar debt and high-interest burdens [10][12]. Group 5: Gold's Financial Recognition - In July 2025, gold will be officially recognized as a level one asset under Basel III, allowing it to be fully counted in risk asset calculations, thus enhancing its status in the financial system [12][14]. - The World Gold Council is promoting the concept of "digital gold," which utilizes blockchain technology to create unique records for each gold bar, transforming gold into an active asset that can be used for collateral financing [12][14]. Group 6: Global Monetary Landscape - The global monetary system is increasingly divided into two camps: the Eastern camp led by China and BRICS, focusing on a gold-backed currency, and the Western camp led by the U.S., emphasizing digital assets [14][18]. - Currently, central banks allocate 20% of their total reserves to gold, with analysts suggesting this should increase to 30%, representing a potential demand for gold worth $2 trillion [16][18]. Group 7: Investment Opportunities - For ordinary investors, incorporating a certain percentage of gold ETFs into asset allocation is advisable, while also considering copper and emerging digital assets like Bitcoin for short-term trading opportunities [16][18]. - Renminbi-denominated assets, including Chinese government bonds and blue-chip stocks, are positioned to become a new "safe haven" for global capital during turbulent times [16][18].

Core Insights - The dominance of the US dollar is being challenged as global central banks increase their gold reserves, with China leading the way in establishing a "gold corridor" that disrupts the dollar-centric monetary system [4][6][10] Group 1: Historical Context - The Bretton Woods Conference in 1944 established a gold standard that pegged the dollar to gold, granting the US significant monetary privileges [4] - The decoupling of the dollar from gold in 1971 allowed the US to maintain its monetary dominance through the petrodollar system, leading to significant economic consequences for other nations [4][6] Group 2: Current Developments - In 2023, global central banks collectively purchased 1,037 tons of gold, with the IMF reporting a decline in the dollar's share of global foreign exchange reserves from 72.7% in 2001 to 58% [6][10] - China's establishment of a "gold corridor" enables direct conversion of the renminbi to physical gold, creating a parallel financial settlement system that bypasses traditional Western financial institutions [8][10] Group 3: Future Implications - The inclusion of gold as a primary asset under Basel III regulations marks a significant shift, allowing gold to be fully counted as a core financial asset [8][10] - The potential for gold to be recognized as a high-quality liquid asset could fundamentally alter global financial dynamics, similar to US Treasury bonds [10][12] Group 4: Investment Strategies - The current trend indicates a structural revaluation of gold, with predictions of gold prices reaching $5,000 per ounce by 2026 due to increased demand from central banks and fiscal concerns in the US [12][14] - A three-tier investment strategy is suggested: foundational investments in gold ETFs, mid-level investments in copper and other metals, and innovative investments in high-beta assets like Bitcoin [14][16] Group 5: Global Trends - Over 20 countries are reducing their reliance on the dollar through bilateral currency settlements, with China signing currency swap agreements with over 40 nations [16] - The rise of gold as a trusted asset reflects a broader re-evaluation of monetary trust, with the potential for the renminbi to gain backing from physical assets [16]